Introduction
A Public good is that which is non-exclusive that is, it is available to all irrespective of who paid for it. Non-rivalry meaning that, the use of the good does not cause any rivalry amongst the users of the good. Free riding explains that the good is for the generally defined public and no specific owner thus, there are no means and end to privatize the good (Winston, 2006 p.23).
Roads to some extent are closing to be public goods as it satisfies the all the other characteristics except for non-rivalry. Reason being that when roads get congested rivalry amongst users is caused.
Steel mills pollute the general natural environment. The pollution of the environment infringes the right of people to use the resource peacefully. Thus, government actions are necessary to curb environmental pollution by steel mills. The best remedy in consideration is the enactment of laws and regulations that will control the amount of sulfur oxides into the air.
This can be done using taxes and incentives to discourage the emission of sulfur oxides and to facilitate the reduction of sulfur oxides emission to the atmosphere; this can be achieved by imposing tax on every unit of sulfur oxide emitted into the atmosphere released and providing incentives to every action to reduce emission of sulfur oxides. Just as the emission of sulfur, smoking is detrimental to the public as it is harmful to the health of both the smoker and third party (Winston, 2006 p.93).
The government can also impose taxes on cigarettes to discourage consumption while establishing specific places in the public for smoking. Driving while under the influence of a drug can cause accidents and thus should be discouraged by the use of road safety specific rules and regulations.
Price
P
Q
Quantity
Monopolies set market prices thus usually price their products high than the estimated market prices. The marginal private cost is the additional cost to the firm of producing one more unit of output while marginal social cost is the cost to the society of producing the extra unit (Winston, 2006 p.123).
The first statement is true since production is driven by public demand, which is raised by the social benefits. The second statement is false as the production costs increase is detrimental to profit maximization. The third statement is true as taxes discourage any unwarranted behavior.
Works Cited
Winston, Clifford. Government Failure Versus Market Failure: Microeconomics Policy Research and Government Performance. Washington, D.C: AEI-Brookings Joint Center for Regulatory Studies, 2006. Print.
